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Iran says Shell, Repsol offer new gas proposal

TEHRAN, June 9 (Reuters) - Royal Dutch Shell (RDSa.L: Quote, Profile, Research) and Repsol (REP.MC: Quote, Profile, Research) have offered a new proposal for initial production of Iran's major gas project in the Gulf, Oil Minister Gholamhossein Nozari said on Tuesday, the semi-official Mehr news agency reported.

"Shell and Repsol have offered a new proposal for initial production of Phase 13 and 14 of South Pars gas field," Nozari said.Iran said in April it had given Anglo/Dutch Shell and Spain's Repsol until May 20 to clarify their involvement in the project.

The Persian LNG project concerns development of production and exports of liquefied natural gas from a part of the South Pars field in the Gulf. Repsol, Shell and state-run National Iranian Oil Company (NIOC) signed an initial deal in 2002 to develop Phase 13 of South Pars.

Last year, Shell delayed decisions on multi-billion dollar investments in Iranian LNG plans due to political tension. Repsol has large investments in Iran, which is also the world's fourth-largest oil producer.

Repsol and Shell signed a service contract for the Persian LNG project in January 2007, setting out the conditions for exploration and development operations in Phases 13 and 14 of South Pars.

It said production from those phases would feed a future LNG plant that would have two liquefaction trains, each with capacity for 8.1 million tonnes/year, but that a final investment decision had yet to be taken.

Iran sits atop the world's second largest gas reserves after Russia, but sanctions imposed on the country over its disputed nuclear programme has slowed development of exports.

LNG is gas cooled to liquid under pressure for transportation in special tankers.